Historical Context
The concept of a “Good Delivery Bar” stems from the need to standardize bullion trading. The London Bullion Market Association (LBMA), established in 1987, sets the standards for these bars, ensuring consistency, quality, and reliability in the gold and silver markets.
Specifications
A Good Delivery Bar must meet several stringent requirements set by the LBMA. These specifications include:
- Weight: Gold bars must weigh between 350 and 430 troy ounces, typically around 400 ounces. Silver bars must weigh between 750 and 1,100 troy ounces, typically around 1,000 ounces.
- Purity: Gold bars must have a minimum fineness of 995.0 parts per thousand, while silver bars must have a minimum fineness of 999.0 parts per thousand.
- Dimensions: The dimensions of gold bars must be within the tolerances specified by the LBMA, generally about 250 x 70 x 35 mm.
- Markings: Each bar must bear the following marks:
- Serial number
- Assay stamp of the refiner
- Fineness
- Year of manufacture
Key Events
- 1987: Formation of the LBMA, bringing together bullion market participants and establishing Good Delivery standards.
- 2004: Introduction of the LBMA Good Delivery List for silver bars.
- 2018: Implementation of more stringent audit and monitoring procedures to maintain and enforce standards.
Detailed Explanations
Good Delivery Bars are vital to the bullion market for several reasons:
- Liquidity: Their standardized specifications facilitate easy trading on global markets.
- Trust: Ensures bars meet rigorous quality controls, fostering trust among investors and traders.
- Efficiency: Streamlines the process of verification, reducing transaction times and costs.
Charts and Diagrams
graph TD;
A[Good Delivery Bar]
A --> B[Weight Specifications]
A --> C[Purity Specifications]
A --> D[Dimension Specifications]
A --> E[Marking Specifications]
B --> B1[Gold: 350-430 troy ounces]
B --> B2[Silver: 750-1100 troy ounces]
C --> C1[Gold: Minimum 995.0 parts per thousand]
C --> C2[Silver: Minimum 999.0 parts per thousand]
D --> D1[Typical Gold: 250 x 70 x 35 mm]
E --> E1[Serial number]
E --> E2[Assay stamp of refiner]
E --> E3[Fineness]
E --> E4[Year of manufacture]
Importance and Applicability
Good Delivery Bars are crucial for:
- Central banks and governments: For reserves and financial stability.
- Financial institutions: For collateral and trading.
- Manufacturers: For ensuring high-quality raw materials.
Examples
- Central Bank Reserves: Many central banks hold their reserves in Good Delivery Bars to ensure liquidity and value.
- ETF Backing: Exchange-Traded Funds (ETFs) like SPDR Gold Shares back their holdings with Good Delivery Bars.
Considerations
When dealing in Good Delivery Bars, consider:
- Storage: These bars require secure storage facilities, often at significant costs.
- Insurance: Adequate insurance is necessary to protect against theft and damage.
- Verification: Even Good Delivery Bars should be periodically verified to ensure authenticity.
Related Terms
- Troy Ounce: A unit of measure for precious metals, equivalent to approximately 31.1035 grams.
- Fineness: The purity of precious metals, expressed in parts per thousand.
- Assay: The testing of a metal to determine its content and quality.
Comparisons
- Good Delivery vs. Non-Good Delivery: Non-Good Delivery bars may not meet the stringent standards of the LBMA, making them less desirable in high-level trading.
- Gold vs. Silver Good Delivery Bars: Gold bars are generally smaller and heavier compared to silver bars, which are larger and lighter due to the different densities and uses.
Interesting Facts
- London Good Delivery List: The LBMA maintains a list of approved refiners whose bars meet the Good Delivery standards.
- Audits: LBMA-approved refiners undergo rigorous audits to ensure compliance with standards.
Inspirational Stories
- Gold during crises: During economic crises, the demand for gold bars, especially Good Delivery Bars, often spikes as investors seek safe-haven assets.
Famous Quotes
- “Gold is money. Everything else is credit.” – J.P. Morgan
Proverbs and Clichés
- “As good as gold.”
Expressions, Jargon, and Slang
- Good Delivery: Refers to the quality and acceptability of a metal bar in the bullion market.
- Four Nines: Slang for gold or silver with a fineness of 999.9 parts per thousand.
FAQs
-
What makes a Good Delivery Bar special? A Good Delivery Bar meets the strict specifications set by the LBMA, ensuring it is widely accepted in international markets.
-
Can I buy a Good Delivery Bar? Yes, they are available for purchase through authorized dealers and exchanges.
-
How do I verify a Good Delivery Bar? Verification involves checking the bar’s markings and possibly conducting an assay test.
References
- London Bullion Market Association (LBMA): lbma.org.uk
- “The Gold Standard,” by Kenneth W. Dam
- “The Silver Market Phenomenon,” by Jana Moser et al.
Summary
A Good Delivery Bar is a gold or silver bullion bar that meets the rigorous standards set by the LBMA. These bars are essential in ensuring liquidity, trust, and efficiency in the bullion market. With precise specifications regarding weight, purity, dimensions, and markings, Good Delivery Bars represent the highest quality of bullion products available for trading globally. They play a critical role in central bank reserves, ETF holdings, and more, making them a cornerstone of modern financial systems.
